ACCA F8 Audit and Assurance (AA) Syllabus Information
The F8 Audit and Assurance (AA) module of ACCA accounting courses is structured to provide you with a firm grounding in the process of carrying out the assurance engagement and how it is applied within the context of the professional regulatory framework.
There are seven main areas within the F8 Audit and Assurance module which starts with an in depth analysis into the reasoning behind assurance engagements, their nature and scope. The statutory audit and its regulatory environment are also among the initial areas covered as well as an introduction to the professional ethics relating to audit and assurance. The course progresses into internal audit and its scope as well as the difference between internal audit and external audit. It also covers a range of topics relating to an audit of financial statements.
ACCA F8 Audit and Assurance syllabus is divided into seven parts as listed below:
A. Audit and framework regulation
1. The concept of audit and other assurance engagements
2. Statutory audit
3. The regulatory environment and corporate governance
4. APB ethical standards and ACCA’s Code of Ethics and Conduct
B. Internal Audit
1. Internal audit and corporate governance
2. Differences between the external auditor and the internal audit function
3. The scope of the internal audit function
4. Outsourcing the internal audit function
5. Internal audit assignments
C. Planning and risk assessment
1. Objective and general principles
2. Assessing the risks of material misstatement
3. Understanding the entity and its environment
4. Materiality, fraud, laws and regulation
5. Analytical procedures
6. Planning and audit
7. Audit documentation
D. Internal control
1. Internal control systems
2. The use of internal control systems by auditors
3. Transaction cycles
4. Tests of control
5. The evaluation of internal control components
6. Communication on internal control
E. Audit Evidence
1. The use of assertions by auditors
2. Audit procedures
3. The audit of specific items
4. Audit sampling and other means of testing
5. Computer-assisted audit techniques
6. The work of others
7. Not-for-profit organisations
1. Subsequent events
2. Going concern
3. Written representations
4. Audit finalisation and the final review
1. Audit reports
2. Reports to management
3. Internal audit reports
The ACCA F8 Audit and Assurance (AA) module is the second to last sub-module of the Skills Module within the Fundamental Level of the overall ACCA syllabus. After successfully completing the F8 and F9 modules candidates are able to move onto the Professional Level.
ACCA Audit and Assurance F8 Exam - Past Papers and Questions
a) ISA 315 (UK & Ireland) Identifying and assessing the risks of material misstatement through understanding the entity and its environment, requires auditors to understand the entity’s internal control. An entity’s internal control is made up of several components.
State the FIVE components of an entity’s internal control and give a brief explanation of each component.
b) ISA 700 (UK & Ireland) The auditor’s report on financial statements provides guidance on the form and content of the auditor’s report and should contain a number of elements.
Describe FIVE elements of an unmodified auditor’s report. (5 marks)
a) Describe the auditor’s responsibility for subsequent events occurring between:
i. The year-end date and the date the auditor’s report is signed; and
ii. The date the auditor’s report is signed and the date the financial statements are issued.
b) Humphries Ltd operates a chain of food wholesalers across the country and its year end was 30 September 2011. The final audit is nearly complete and it is proposed that the financial statements and audit report will be signed on 13 December. Revenue for the year is £78 million and profit before taxation is £7.5 million. The following events have occurred subsequent to the year end.
A Customer of Humphries Ltd has been experiencing cash flow problems and its year-end balance is £0.3 million. The company has just become aware that its customer is experiencing significant going concern difficulties. Humphries believe that as the company has been trading for many years, they will receive some, if not full, payment from the customer; hence they have not adjusted the receivable balance.
A key supplier of Humphries Ltd is suing them for breach of contract. The lawsuit was filed prior to the year end, and the sum claimed by them is £1 million. This has been disclosed as a contingent liability in the notes to the financial statements; however correspondence has just arrived from the supplier indicating that they are willing to settle the case for a payment by Humphries Ltd of £0.6 million. It is likely that the company will agree to this.
Humphries Ltd has three warehouses; following extensive rain on 20 November significant rain and river water flooded the warehouse located in Bass. All of the inventory was damaged and has been disposed of. The insurance company has already been contacted. No amendments or disclosures have been made in the financial statements.
For each of three events above:
1. discuss whether the financial statements require amendment;
2. describe audit procedures that should be performed in order to form a conclusion on the amendments; and
3. explain the impact on the audit report should the issue remain unresolved. (15 marks)
Note: The total marks will be split equally between the events
The examination lasts for three hours with 15 minutes before hand for reading and planning. The pass mark is 50%.